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Bell Pottinger has been thrown out of the UK PR trade body after an investigation found its campaign for South Africa’s Gupta family was likely to “inflame racial discord”.

The Public Relations and Communications Association (PRCA) imposed its most serious sanctions on the agency over its work for Oakbay Capital.

The PR firm cannot reapply to join the PRCA for at least five years after it was found to have breached two clauses of the organisation’s professional charter and two clauses of its code of conduct.

The trade association’s professional practices committee found Bell Pottinger‘s campaign was “likely to inflame racial discord in South Africa and appears to have done exactly that”.

PRCA director general Francis Ingham said: “Bell Pottinger has brought the PR and communications industry into disrepute with its actions, and it has received the harshest possible sanctions.

“The PRCA has never before passed down such a damning indictment of an agency’s behaviour.

“This outcome reflects the huge importance that the PRCA places on the protection of ethical standards in the business of PR and communications.”

Bell Pottinger said it acknowledges the ruling, “accepts that there are lessons to be learned but disputes the basis on which the ruling was made”.

In a statement, the agency said it will continue to abide by the PRCA’s code of ethical conduct on a voluntary basis.

The ruling came after an independent report, conducted by law firm Herbert Smith Freehills (HSF), said Bell Pottinger senior management should have been aware of the risks surrounding a campaign related to race.

“Certain material that we have seen that was created for the campaign was negative or targeted towards wealthy white South African individuals or corporates and/or was potentially racially divisive and/or potentially offensive and was created in breach of relevant ethical principles,” the report said.

The fact that Bell Pottinger management “recognised” that its client was controversial and that the campaign was “sensitive and related in part to the issue of race” was not enough.

“While we do not consider that it was a breach of relevant ethical principles to agree to undertake the economic emancipation campaign mandate per se, members of BP’s senior management should have known that the campaign was at risk of causing offence, including on grounds of race,” the report added.

The PR firm’s chief executive James Henderson resigned over the weekend, days before the report’s release.

The Bell Pottinger team had used phrases such as “white monopoly capital” to promote the Oakbay campaign, raising wider concerns that the PR firm was instrumental in stirring racial tensions in the country.

However, HSF countered allegations that Bell Pottinger had invented the term specifically for the economic emancipation campaign, saying it had been in use before taking on the Oakbay mandate.

Bell Pottinger said the Oakbay campaign was not representative “of the way it works in general”, and assured it was reflecting on the findings.

It said: “Bell Pottinger is determined to learn lessons from this review, take appropriate action and instigate all necessary measures to ensure that the agency meets the highest ethical and industry standards which it has always endeavoured to uphold.”

The PR firm has pledged to introduce a more formal review of client work that will help to “identify high-risk clients and high-risk mandates”, update its training programme, redevelop its corporate policies including for social media, and establish a new ethics committee.

It also plans to “engender a culture” where junior staff can more easily challenge the work of their superiors, which will be separate from its existing whistleblowing policy, it said.